Tax planning is the development of strategies to minimize or
defer the tax burden of a society. A company may have to face more or less
taxes and in different periods of time depending on various circumstances. Tax
planning analyzes them and designs the most favorable map for it. Tax spending
is minimized and / or postponed as much as the law allows and as much as the
company agrees.
With proper tax planning and through identifying appropriate
opportunities for tax savings, the tax a business bears can be optimized. In this
article, Jim Liggett CPA, an accounting professional and
partner at Liggett & Webb P.A., explains how tax planning and compliance can
help you manage your tax affairs efficiently and
finding legitimate tax savings opportunities.
What is Tax Planning?
One of the main tasks of a tax consultancy is the tax
planning of its clients. This is nothing more than the development and analysis
of strategies to delay or minimize the tax burden of a company. In various
contexts, always within the law, companies can face lower taxes or defer them
over time if planned correctly. However, it is a much more complex tool than it
may seem.
Two businesses engaged in the same activity and with similar
characteristics can pay taxes very differently. This is usually because one of
the companies has correctly planned its taxation. One of them has made
decisions that have made face lower taxes or delay them over time. The other
has not, but both continue to comply with the law in exactly the same way. How
is this possible?
Certain types of companies have tax benefits, we can try to
avoid double taxation, choose a legal form that benefits us in the future,
defer the payment of taxes to increase liquidity, etc.
Now, it is important to know what tax planning is, but just
as important is to know what it is not. Tax planning is not tax evasion or tax
fraud. According to Jim Liggett CPA, the key thing is to analyze the variables
to detect the best formula to minimize expenses by acting within the law. In
the end, it consists of taking into account what will be the tax burden that a
company will have to face, and what will be the best moment to do so.
As a Certified Public Accountant with extensive experience
in the preparation of financial statements, taxation, and special engagements
in preparing business valuations, Jim Liggett CPA has the breadth of knowledge
and depth of experience to assist companies.
